Tax and dividend plan could be the answer
Time is running out to slash greenhouse gas emissions enough to save the Earth from catastrophic global warming.
But as long as climate change remains — strangely — a partisan issue, the chances for swift action are slim. For that reason, we are pleased to see the Citizens Climate Lobby advocate for a bipartisan approach that could break through political paralysis in Washington, D.C.
Members of the Portland chapter of the climate lobby, including Republicans and Democrats, have written guest columns for these pages as well as visited with the Pamplin Media Group editorial board. They are urging Oregon's congressional delegation to get behind a carbon tax and dividend plan, dubbed the Energy Innovation and Dividend Act.
Experts say the most effective way to slow climate change is to slap a price on carbon emissions. With that one seemingly simple change, the true environmental costs would be embedded into goods derived from fossil fuels, heralding a new era in which green and sustainable alternatives are more economical.
There are different visions for putting a price on carbon, such as the "cap-and-invest" plan gaining traction in the Legislature. The state's lawmakers are right to consider local action, but climate change is far larger than Oregon. It's an international problem needing a global response.
But solutions also must be palatable to ordinary people who are just as worried about their everyday lives as they are about the incremental advance of climate change.
One criticism of Oregon's cap-and-invest alternative is that it would hit low-income people the hardest, because they spend a larger share of their income on energy, which will shoot up in price. As the Yellow Vest revolt in France suggests, unduly hurting people who can least afford it isn't a wise way to build public support for fighting global warming.
The Citizens Climate Lobby's tax and dividend plan has the opposite effect, and will actually put more money in the pockets of most middle- and working-class people, as well as the poor. And that could be pivotal to gaining support.
The Energy Innovation and Dividend Act initially would levy a $15-per-ton carbon tax, which would raise the price of gasoline an estimated 14 cents per gallon. That's not enough to make a serious dent in carbon emissions, so the tax would increase by $10 per year for 20 years. Activists in the Citizens Climate Lobby, which has active chapters throughout Oregon, say this plan will drive down emissions 40 percent in 12 years and 90 percent in 50 years.
Oregon's cap-and-invest plan would use the revenue collected to promote renewable energy and the transition to a greener economy. The tax-and-dividend plan, in contrast, is revenue-neutral, meaning the government won't get more money. All proceeds would get rebated to U.S. adults on a per-capita basis. (Children get a half-share.)
According to Portland members of the Citizens Climate Lobby, that means an estimated $50 per month per-person during the first year, and as much as $200 per month within five years to offset higher energy prices.
Fuel companies and the politicians they back may continue fighting any solution. But if the bulk of Americans on the lower half of the income scale make out better, that eases the impact of the dramatic shifts ahead. It also builds potential support that will make it difficult to topple the plan.
Think of an example close to home: Oregon's quirky income tax "kicker" rebates. The rebates are flawed fiscal policy, because they send income taxes back to Oregonians when the economy is humming and the public sector should be building up its reserves. When the economy sours, there's little savings to tide us through hard times.
But politicians from both parties are reluctant to tamper with Oregonians' cherished kicker rebates.
Politicians, similarly, wouldn't want to tinker with carbon rebates once they started flowing. A tax and dividend plan may have a better shot at public acceptance than cap and invest, but that doesn't mean it might not have its own set of unintended consequences. Its effect on businesses — all of which use energy — must be analyzed and more completely understood. Those are details worth serious examination by members of both parties in Washington, D.C.
Left unchecked, though, the climate crisis will wreak havoc on Earth's humans, plants, animals and natural features. Addressing it requires sacrifices. It also requires that well-intentioned people of all political persuasions consider the issue with appropriate urgency.
The Citizens Climate Lobby is the most prominent organization attempting to build the essential bipartisan support — which means our congressional delegation should pay close attention to its proposed solutions.